As planned, Bumi Resources (BUMI) Production Target Approved 80 Million Ton Coal

Jakarta,- PT Bumi Resources Tbk (BUMI)'s production target for 2024 finally found clarity after the company's Work Plan and Budget (RKAB) was approved. Previously, PT Bumi Resources Tbk (BUMI) indicated that the production target for 2024 was in the range of 80 million tons of coal, or did not move compared to the 2023 target which was in the range of 77 million tons to 80 million tons of coal.

The hint was conveyed by BUMI Director Dileep Srivastava in an online public expose, Wednesday (6/12/2023). "BUMI has not confirmed the production target for 2024, but it is reasonable to estimate the production target at around 80 million tons. When it is finalized, we will convey it," he said.

He added that coal prices in 2024 will increase by 8-10 percent compared to 2023 prices. "If we look at the forward chart of coal prices, there is indeed an upward trend," he said.

Now BUMI management revealed that the company has pocketed the Work Plan and Budget (RKAB) from the government, especially the Ministry of Energy and Mineral Resources (ESDM), for 2024-2026.

The RKAB that BUMI has pocketed includes for its subsidiaries, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia.

BUMI Director and Corporate Secretary Dileep Srivastava revealed that the company's RKAB had been approved for 2024-2026. Especially in 2024, the company internally targets coal production of up to 80 million tons.

"BUMI has received the RKAB for KPC and Arutmin for the 2024-2026 period," he said, Wednesday (31/01/2024).

Dileep said the figure was an accumulation of the targets of its two subsidiaries, PT Kaltim Prima Coal and PT Arutmin Indonesia.

"This is to confirm that BUMI's internal target is to exceed 80 million tons by 2024," he said.

When compared to the previous year's production, Dileep said the coal production target for 2024 was higher than 2023, which was 78 million tons. Meanwhile, the target in 2023 was also higher than in 2022 at 70 million tons.

"(Target) 70 million tons in 2022 and around 78 million tons in 2023," he said.

For information, the Ministry of Energy and Mineral Resources has officially issued new rules regarding the procedures for preparing, submitting, and approving the RKAB for the mineral and coal mining sector (minerba). This regulation is contained in Minister of Energy and Mineral Resources Regulation Number 10 of 2023.

At least, there are several important points contained in this Permen. Among them are the distribution of activity time for RKAB, administrative sanctions, fulfillment of essential aspects in the preparation of RKAB and time efficiency.

Previously, Dileep also emphasized that there are several challenges that the coal industry must face. Fluctuations in coal prices and bad weather are among those being watched until the end of the year.

According to him, the commodity cycle that makes coal price fluctuations must be watched out for because it cannot be predicted.

Another challenge is the soaring price of fuel, which is considered to increase the company's operational cost component. The regulation regarding the deposit of 30% of export revenue for 3 months, which has been in effect since August 1, 2023, is also something to watch.

Efficiency, digitalization, coal downstreaming, and non-coal diversification are also included as challenges in pursuing the coal production target in 2023.

Sources : Feb 01.24

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